Debating Regulatory Reform at the US House of Representatives

US_House-Representatives

On March 2nd the Subcommittee on Regulatory Reform, Commercial and Antitrust Law of the United States House of Representatives held a public hearing on three acts (“the rapid act”; “the sunshine for regulatory decrees and settlements act” and “the scrub act”). These acts, as was explained in the opening remarks by the Honorable Bob Goodlatte, are of great importance to the improvement of the quality of regulation. In a nutshell:

  • H.R. 348, the RAPID Act contains reforms to streamline permitting for federally-funded and federally permitted construction projects. It gives lead agencies more power to conduct and conclude efficient inter-agency reviews of permit requests and requires lawsuits that challenge permitting decisions to be filed within six months of the decisions.
  • H.R. 712, the Sunshine for Regulatory Decrees and Settlements Act curbs the abuse of “Sue-and-Settle” consent decrees and settlement agreements to force through new regulations – under judicial authority – without adequate consideration of the views of those who are regulated and of the States.
  • H.R. 1155, the SCRUB Act institutes a blue-ribbon commission to help identify and eliminate costly regulations that can safely be removed from the Code of Regulations (e.g. regulations that have achieved their purpose and are no longer needed).

Four witnesses were invited to provide their opinions: (1) William Kovacs (Senior Vice President, Environment, Technology & Regulatory Affairs U.S. Chamber of Commerce); (2) Sam Batkins (Director of Regulatory Policy American Action Forum); (3) Patrick McLaughlin (Senior Research Fellow Mercatus Center at George Mason University); (4) Amit Narang (Regulatory Policy Advocate Public Citizen).

All witnesses provided insights to the importance of the three acts and the impact they may have on the quality of regulation. In what follows, the main comments are underlined.

William Kovacs outlined four principles for real regulatory reform: (1) Restore federal agency accountability to the public and Congress; (2) Ensure greater transparency by agencies in their decision making process and their actions; (3) Allow improved, meaningful participation by stakeholders; (4) Guarantee that the federal process to permit major new projects as safe but swift.

Sam Batkins pointed that: (1) over time, as agencies issue an average of 75 major rules annually, regulatory accumulation will naturally result. Since 2008, regulators have added more than $107 billion in annual regulatory costs. This accumulation affects employment, consumers, and the broader economy. (2) It is because regulatory reform has failed so often in the past that we continue to talk about its place in the future. Whether it’s the failure of agencies to comply with the Paperwork Reduction Act, the Congressional Review Act, or the current executive orders, it’s clear there are opportunities for meaningful reform that address cumulative burdens and the regulatory process. (3) The proposed legislation could generate substantial regulatory savings. The American Action Forum (AAF) attempted to quantify savings from the SCRUB Act and the Sunshine for Regulatory Decrees and Settlements Act and found billions of dollars in possible benefits and 1.5 billion hours of less paperwork.

Patrick McLaughlin pointed out that regulatory accumulation in the United States, with its adverse impact on economic growth by impeding innovation and entrepreneurship, is now a widely recognized problem. Furthermore, the costs of regulation are disproportionately borne by low-income households and the accumulation of regulations may make us less safe overall as compliance becomes more thinly spread between functional and nonfunctional rules. Regulatory reform that reduces the overall burden of regulations would act as a progressive tax refund for American households. Nonetheless, noted McLaughlin, the problem has not been meaningfully addressed despite the efforts of several administrations. Based on the examination of the obstacles to successful regulatory cleanup and the models of successful government reform, it is recommended the creation of an independent Regulatory Review Commission with a clearly defined mission.

According to Amit Narang, the three bills being considered in the testimony, when scrutinized together, demonstrate that supporters of this legislation seek to manipulate the regulatory process so it is as efficient and effective as possible when working in the interests of regulated industries and as inefficient and ineffective as possible when working to protect the public.

(Gianluca Sgueo)